Bangkok wants to sign an FTA with Dhaka
High tariffs on Thai products stifle exports to Bangladesh to desired level despite strong demand, Thai official says
Thailand wants to sign a Free Trade Agreement (FTA) with Bangladesh to increase bilateral trade, as tariff and non-tariff barriers hamper the promotion of trade potential between the two countries.
Thai business advisor in Dhaka Khemathat Archawathamrong expressed this view in an interview with Dhaka Tribune recently.
He said the high tariffs on Thai products are choking exports to Bangladesh to the desired level despite the high demand.
Bangladesh became a member of the middle-income group this year with economic growth of 7-8% per year ahead of the Covid-19 outbreak last year.
Citing high tariff and non-tariff barriers (NTBs) as bottlenecks in promoting trade, the advisor to the Thai Minister (Trade) called for both problems to be removed.
Referring to the high-level meetings between two countries in Bangkok on several occasions, he also said that Thailand raised the issue of high tariffs and urged Bangladesh to reduce high tariffs on Thai products.
Read also – Bangladesh signs memorandum of understanding to import rice from Thailand
Citing an example, he said Bangladesh taxes some 62.50% on rice and 89.32% on mango.
In addition, the import of mangoes is banned until August in Bangladesh.
Emphasizing on increasing trade between the two countries, he said before the Covid-19 pandemic, the two sides had agreed to set a target of $ 2 billion in 2020, during the JTC meeting held in Bangkok.
He believes that Thai products are becoming popular in Bangladesh with the expansion of the local economy.
Meanwhile, Bangladesh Foreign Minister Dr AK Abdul Momen, in a meeting with Bangladeshi diplomats working in ASEAN countries, highlighted the increase in trade in the regions.
Former Minister of Commerce Tofail Ahmed, at the opening of the Thai trade fair in Dhaka in 2018, expressed interest in signing an FTA with Thailand. The agreement should cover all major areas of cooperation, such as trade in goods, services and investments, ensuring mutual benefits, Tofail Ahmed added.
Trade Minister Tipu Munshi said Bangladesh is striving to create sustainable trade facilities by signing Free Trade Agreements (FTAs) with various friendly countries.
Bangladesh has been a great beneficiary of an open market economy and globalization; Naturally, the government will continue the practice of an open economy to encourage and facilitate business, he also said.
Apart from this, the discussion will also focus on how to strengthen the Bimstec and Asem regional forums.
On a question of recruiting Bangladeshi workers in Thailand, Khemathat Archawathamrong said the pandemic has hit the economy and restricted the movement of people.
He said, however, that the Thai fishing industry may revisit the situation when the pandemic is over and normalcy returns.
Dhaka called on Bangkok to revive the proposal to recruit skilled, semi-skilled and unskilled Bangladeshi workers for its labor-deficit sectors.
In the past, the fishing industry wanted the government to work with authorities in Bangladesh to provide 50,000 workers to solve a labor shortage in Thailand’s growing fishing industry.
Welcoming the role of microcredit in poverty reduction, Khemathat Archawathamrong said Thailand has introduced this model to lift people out of poverty.
Regarding the complications of obtaining a Thai visa, he said he would discuss the matter with the relevant authorities in order to remove the obstacles and speed up the visa process.
He expressed the opinion that members of reputable and established trade bodies such as the Bangladesh Federation of Chambers of Commerce and Industry (FBCCI), Bangladesh Garments Manufacturers and Exporters Association (BGMEA), Metropolitan Chamber of Commerce and Industry (MCCI ), DCCI, Bangladesh Chamber of Industries (BCI), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) can get the privilege of getting Thai visa in addition to other well-known and established businessmen.
Meanwhile, in January 2020, Deputy Prime Minister and Minister of Commerce of Thailand Jurin Laksanawisit at the Fifth Thailand-Bangladeshi Joint Trade Committee (JTC) meeting with Bangladesh Minister of Commerce Tipu Munshu held in Bangkok put emphasis on promoting trade between the two countries and focused on agriculture, fisheries, animal husbandry, health services and transport.
Thailand views Bangladesh as an important strategic partner in terms of trade, investment and transport. It was Thailand’s third largest trading partner in South Asia in 2018, he said.
The $ 1.2 billion in annual trade between countries includes $ 1.2 million in Thai exports to Bangladesh and $ 59 million in imports from Bangladesh.
Meanwhile, Dhaka called on Bangkok to expand the duty-free, quota-free market or DFQF easy access to include more Bangladeshi products with export potential to Thailand.
It also handed over a list of 36 products to Thailand for consideration as part of the DFQF list review this year.
In the first 11 months of 2019, Thai imports from Bangladesh increased by 38.3% compared to the same period of 2018. And Thai interest is increasing in key products such as jute yarn, footwear and ready-made clothing.
Thai direct investment in Bangladesh from 2006 to 2019 amounted to $ 1.5 billion, much of which went to agro-industrial and agro-industrial enterprises, construction and hotels.
Bangladesh’s direct investment in Thailand during the same period amounted to $ 1.12 million.
The partners are in an advantageous geographical proximity for mutual trade and the extension of their trade across the region. Thailand is at the heart of Southeast Asia and has an infrastructure and policy to support investments in the form of development projects like the Eastern Economic Corridor, through which Bangladesh will be able to distribute its goods in the region and East Asia. Bangladesh in the Indian Ocean has modern infrastructure to facilitate Thai products and services in South Asia, the Middle East and Africa, he said.
Thailand is seeking to link Ranong Port more closely with Chittagong Port in Bangladesh as a freight channel.
At the meeting, Thailand’s Minister of Commerce JurinLaksanawisit invited Bangladeshi businessmen to visit the international exhibitions held here every year, such as the Bangkok Gems and Jewelery Fair, Thaifex and Style Bangkok, and he urged Dhaka to conclude a free trade agreement with Bangkok.
Meanwhile, after two decades, in July 2017, the foreign ministers of Bangladesh and Thailand called the seventh joint commission of the two countries a major milestone in bilateral relations.
The meeting in Dhaka was the first of its kind in two decades.
The then Foreign Minister, AH Mahmood Ali, and his Thai counterpart Don Pramudwinai agreed that the meeting was an important step and a harbinger of a dynamic chapter in our bilateral relations.
The two sides welcomed the cumulative Thai investment in Bangladesh of $ 1.5 billion and the recent investment proposal worth $ 250 million in the energy sector.
Former Foreign Minister Ali invited new Thai investments in tourism, Buddhist circuit tourism, health, hospitality, food processing, taking advantage of SEZs and computer park.
Meanwhile, Dr Khondaker Golam Moazzem, research director of the Center for Policy Dialogue (CPD), said that a free trade agreement (FTA) involves cooperation between at least two countries to reduce trade barriers, such as quotas and tariffs, and to increase trade in goods and services between them.
Citing an example, Moazzem also said Thailand’s auto industry is the largest in South Asia.
Thailand can invest and establish an auto assembly plant in Bangladesh so that the latter can re-export auto parts and components to Thailand, he added.
According to the Bangladesh Export Promotion Bureau, the main products imported from Thailand to Bangladesh are cement, grains, plastics, man-made staple fibers, sugar and sweets, machinery and mechanical appliances, and cotton and cotton. cotton fabrics.